IBM Internet Security Systems to buy $ 1.3 billion

With slow growth for IBM, Big Blue is buying its way to do more than that.

The continuing role of the company's recent acquisition of Wednesday to reach an agreement to spend $ 1.3 billion in cash for the company Internet Security Systems, which provides network monitoring and analysis of the companies.

Deal values ​​ISS at $ 28 per share, a premium of nearly 8 percent on its closing price of $ 26 Tuesday in Nasdaq Stock Market. If approved, the acquisition by the shareholders, the companies expect to close in the fourth quarter.

Has won the Armonk, New York-based International Business Machines Corporation three public companies this month. Approved by IBM and two weeks ago, and an agreement of $ 1.6 billion to company management software provider FileNet document on August 3, to spend $ 740 million for MRO Software Inc., which helps industrial companies track physical assets.

This was part of the offers long-term effort to use acquisitions to fill holes in the software package IBM, easily the most profitable part of the company. International Space Station is a bit different because of its potential impact on the reporting of the Division for the company's services.

ISS helps guard against data theft and other problems with the network of automated monitoring products and with technical consultants.

Should expand the scope of IT services and management software IBM sells to business customers. It should also help to service unit with its goal of improving profit margins by integrating more software and "recurring" other offers, if not IBM consultants to create expensive packages designed specifically for each new customer.

These improvements are a necessary process, because the services unit _ which represents more than half of IBM's $ 90 billion in revenues _ are struggling for growth in the face of increased competition. Decreased revenue and unit 1 percent in each of the last two quarters.

Based in Atlanta, the International Space Station says that 11,000 customers including 17 of the largest banks in the world. The company posted $ 38.5 million to $ 330 million in revenue last year, revenues for this year should exceed $ 350 million.

International Space Station in 1300 employees are required to stay with IBM.

The IBM and the International Space Station trading partners since 1999, but the International Space Station CEO Tom Noonan said more open access on the strength of IBM's sales would increase significantly in the market for the International Space Station.

"We were working well together as partners," said Val Rahmani, general manager of IBM's service management infrastructure. "This way we can go faster." The overlap between the customer lists of companies "not important".

This is the largest deal was the second major merger between a leading provider of enterprise infrastructure and security companies, after EMC Corp. $ 2.1 billion acquisition of RSA Security Experts authentication company, which announced in July.

Of the International Space Station rose $ 1.62, or 6.2 per, to close at $ 27.62 on Nasdaq. The share price was low as $ 17.44 in July, before increasing speculation that IBM might buy the company.

Fell 28 cents IBM to close at $ 78.67 in the New York Stock Exchange.

IBM Small Step for a Computer

Being able to compete well at "Jeopardy" against two of its all-time best players may seem like a modest accomplishment for an IBM supercomputer, but Watson, the machine that's playing out a three-day challenge on the TV show, may have bigger fish to fry after it's all said and done. IBM is working with scientists and other experts on developing uses for Watson's skills in healthcare, financial services and government, for starters.

Instantly sorting 15 trillion memory bytes to find the right answer to a "Jeopardy" question: Elementary, my dear Watson.

Or so an IBM (NYSE: IBM) supercomputer named "Watson" set out to prove Monday, tackling trivia with the popular television game show's all-time human champs, Brad Rutter and Ken Jennings.

"A four-letter word for the iron fitting on the hoof of a horse or a card-dealing box in a casino," was a US$400 answer host Alex Trebek gave the trio. "What is a shoe?" Watson answered with a question in "Jeopardy's" famous format.
On its way to a $5,000 round 1 tie with Rutter, Watson made several mistakes, even repeating a previous wrong question -- "What is the 1920s?" -- in answer to "the decade Oreo cookies were introduced" (1912 was the actual year).

"No. Ken already said that," Trebek reminded. It seems like an awfully simple error for such a powerful supercomputer, but the problem doesn't lie with Watson's computational capabilities.

"Watson can't see or hear, so it will go ahead and provide the best possible answer to the question -- even if another contestant already offered it," IBM Research Lab spokesperson Kendra Collins told TechNewsWorld.

Watson didn't repeat any more Ken Jennings mistakes, leaving the man with "Jeopardy's" longest-ever winning streak well behind, with only $2,000 for the night. The "Jeopardy" match continues Tuesday and Wednesday with first, second, and third place winners receiving $1 million, $300,000, and $200,000, respectively.
Out-Housing House

The brainy child of eight universities including the Massachusetts Institute of Technology, University of Southern California, and Carnegie Mellon University -- famous for its robotics programs -- Watson wasn't designed to be all fun and games, IBM's Collins explained.

"We are currently collaborating with a global pool of experts and applied scientists to take Watson's underlying capabilities even further -- into healthcare, financial Enterprise Payment Security 2.0 Whitepaper from CyberSource services and government," she said.

Imagine a "massively intelligent physician's assistant" who can out-House Dr. House, "comparing the symptoms of an individual patient with millions of related case histories to suggest accurate diagnoses," Collins explained.

As a wired Warren Buffett, Watson could answer personal financial questions such as "What should I do with a $50,000 inheritance?" without greed or personal bias. More sophisticated financial risk managers seeking answers to hypothetical scenarios -- "What happens if China's Central Bank raises interest rates by 50 basis points tomorrow?" -- could count on Watson to "build an interactive risk-pricing system using a menu of models that evolve over time as the system learns," Collins said.

For retailers eager to better understand that quintessentially American creation called the "elusive customer," Watson's advanced database analyses "offer the prospect of highly personalized and individual customer Increase sales with VerticalResponse. Free trial. service," Collins said.

Government bureaucrats swimming in laws and regulations can also benefit: Watson could make their jobs more elementary by sorting all the rules and applying them correctly. Want to know which zoning regulations apply to swimming pools or if you have to pay the Alternative Minimum Tax? Watson can answers those common questions with refreshing ease and accuracy, Collins explained.
Step or Leap?

Like all computers, Watson lacks five qualities that set its human "Jeopardy" opponents apart: It can't see, hear, touch, taste or feel. Sophisticated as Watson is, "it only processes text; it does not hear the question being read or anything the other contestants say," like the year Oreos were introduced, explained Simon Fraser University artificial intelligence senior lecturer Toby Donaldson, Ph.D.

Donaldson considers Watson a "good demo" of recent language processing research, but since the computer "doesn't deal with the very difficult problem of converting spoken language into text, Watson is not a giant leap," Donaldson told TechNewsWorld. "Understanding real, everyday language is actually a much bigger problem than coming up with the short answers required by 'Jeopardy.'"

Not to disparage the Big Blue guy, however. "To be good at 'Jeopardy,' you need to quickly read and understand questions that might contain word-play or metaphors, quickly retrieve the right answer, and wager smartly," Donaldson explained. "Getting a computer to do all this is tough stuff, so it was no small effort to build a system like Watson."